Matter of Hiciano v Allstate Settlement Corp NY Slip Op 33207(U) October 20, 2010 Sup Ct, NY County Docket Number: Judge: Judith J.

Matter of Hiciano v Allstate Settlement Corp. 2010 NY Slip Op 33207(U)

October 20, 2010 Sup Ct, NY County Docket Number: 109641-10

Judge: Judith J. Gische

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I

HON.

JUDITH

J. GISCHE

PRESENT: PART

INDEX NO. Index Number : 109641 /2010

HICIANO, FERNANDO VS .

ALLSTATE SETTLEMENT CORP.

SEQUENCE NUMBER : 001 OTHER RELIEFS

MOTION DATE

MOTION SEQ. NO.

00

!

MOTION CAL. NO.

this motion to/for

1

Notlce of Motion/ Order to Show Cause - Affidavit8 - Exhlblts

...

Answering Affldavlts - Exhibits

Replying Affidavits

Cross-Motion:

0

Yes

%

No

Upon the forsgolng papers, it Is ordered that thla motlon

PAPER$ NIJMBERED

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or authorized represri- mumt tappar In penon at the Judgment Clerk‘s De& (Roam 1418).

Check one:

FINAL

DISPOSITION

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NON-FINAL

DISPOSITION

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if

appropriate:

0

DO NOT POST

0

REFERENCE

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK: IAS PART 10

In the Matter of the Petition of DECISION/ ORDER

FERNANDO HICIANO a/k/a Index No.: 109641-10

FERNANDO HlSlANO Seq. No.: 001

for judicial approval

of

absolute assignment

agreement with PRESENT:

SE-TTLEMENT FUNDING OF NEW YORK, LLC, pursuant to Article 5, Title 17 of the

New York General Obligations Law,

X _____I--_____________l_l_r__ll__r_l_____--”---

Hon. Judith J.

Gische

J.S.C.

Petitioner,

-against-

ALLSTATE SETTLEMENT CORPORATION and ALLSTATE LIFE INSURANCE COMPANY OF NY,

Recitation, as required by CPLR § 2219 [a] of the papers considered in the review of this (these) motion(s):

Papem Numbered

Notice of Petition, Petition w/FH affid, exhs

. . .

, 1

Upon the foregoing papers, the decision and order of the court is as follows:

GISCHE J.:

Fernando Hiciano a/k/a Fernando Hisiano (“Hiciano”) is a resident of the State of Pennsylvania and the beneficiary of a structured settlement agreement reached in the

State of New York in 1997 (Index No. 21899/87). This petition by Settlement Funding

of

New York, LLC (“SFNY) is for an order approving the transfer of Hiciano’s structured settlement payment rights to SFNY. If approved by this court, SFNY then has to also obtain the approval of the Pennsylvania courts.

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[* 2]

SFNY has filed proof of service on Hiciano and Allstate. Hiciano has provided

his sworn affidavit in support of the petition. However, Allstate takes no position on the

relief sought and, therefore, the petition is before the court without opposition. The

court’s decision and order is as follows:

Hiciano

seeks

to transfer to SFNY his right to receive 144 monthly payments

each in the amount of $1,533.00 commencing September 12,2002 though August 12,

2034 (“assigned payments”) pursuant to an agreement he entered into with SFNY

dated June 5, 201 0 (“transfer agreement”). The assigned payments are in the

aggregate amount of $220,752. The present discounted value is $1 19,637.49, based upon a discount rate of 3.40%. According to SFNY, the cost of buying a comparable

annuity for the aggregate amount of payments to be transferred is

$183,966.52

and

$170,291.17, based upon quotes SFNY obtained from two other annuity issuers.

The gross advance by SFNY, in return for the assigned payments, is $20,71 I

.02.

After deducting commissions, legal fees ($2,000), a processing fee ($200) and other

charges, Hiciano will receive in hand the sum of $1 8 3 1 1.02.

According to his affidavit, Hiciano needs this money to buy a shipping truck and

invest in inventory and supplies for his importkxport business in the Dominican Republic. He earns $1,500 a month from that business. Hiciano states, without

elaborating, that assignment of his anticipated payments and getting a lump sum

payment from SFNY is preferable to taking out a loan, because he will not have to pay

the money back with interest, as he would with more traditional financing.

In his affidavit, Hiciano states he is married and has three small children, all of

I

year old sister.

I

Discussion

Title 17 of the General Obligation Law (IIGOL”), knows as the “Structured

Settlement Protection Act” (“SSPA”) requires judicial approval of any sale of future

structured settlement payments to a third party (Matter of

Settleme

nt Capital

Corporation v. Drew, 2007 Slip Op 30703 (U) [Sup Ct Queens, 20071 mar.). This is to

protect vulnerable payees from aggressive marketing tactics.

Although the applicant/payee does not have to show economic hardship in order

to have the transfer approved, the SSPA does require that the payee be provided with

adequate disclosure about the proposed transfer, including a comparison

of

the

proposed transfer to the court of purchasing a comparable annuity (GOL

5

5-1703). Examining the documents provided, petitioner has apparently complied with this first

step.

The second step requires that the court to employ a “totality of the circumstances

test,” very similar to that used in family law matters (see In re 321 Henderson Receivables, L.P.,

13

Misc3d 526 [Sup Ct Erie 20061 and cases cited therein). The

court has to see whether the transfer is in the best interest of the payee, taking into

account the welfare and support of his or her dependents (In te 321 Hend erson

Receivables, L.P., supra). This is not only for the protection of the payee, who may be

dependent on the structured payments for their long-term financial security, but also for

the protection of his or her dependents who are dependent on the payee for their

support.

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[* 4]

The court must also take into account whether the payee has obtained or waived

independent professional advice (GOL

5

5-1701).

Hiciano has not shown why it makes sense for him to assign almost $220,000 in

structured payments to SFNY in exchange for the lump sum of $1831 1.02

-

less than 10% of what he is otherwise entitled to receive. Stated another way, if this petition is

granted he will collect a lump sum that is equal to one year’s worth of monthly

payments, but surrender 1 I years’ worth of income for that benefit.

There is no information about the financial health of his business in the

Dominican Republic

or

what attempts he made to secure traditional financing. His explanation, that the money he receives from SFNY will be interest free, makes no

sense given the “price,” in a different sense, he will have to pay for receiving that lump

sum payment. There is no showing that investing this money into his business will yield

better income than what he is giving up.

Hiciano apparently has five (5) dependents, yet inexplicably, he has signed his name to another document stating he only has one, his teenaged sister. His income

from the business is only $1,500 and his monthly payments from the settlement will be

$3,000. Hiciano provides no budget to show that he can still meet his support

obligations when his monthly payments are reduced in 2022. His youngest child is only

five (5) years old. This is Hiciano’s second application for a transfer of payments. The prior application, in 1997, for $217,000, was so he could buy a house.

Although he is being charged for legal fees, Hiciano did not have a lawyer,

although he did meet with a certified public accountant.

cash

at such a steep discount

(In

re

321

Henderson

Receivables, L.P,, supra; In re 321 Henderson.

L

LC, 19 Misc3d 504 [Sup Ct Queens Co.

20081).

Therefore, the petition is denied.

Conclusfon

In accordance with the foregoing, It is hereby,

ORDERED DECLARED AND ADJUDGED that

t h e

petition is denied and this

proceeding is dismissed

This constitutes the decision, order and Judgment of the Court.

Dated: New York, New York October 20,201 0

So Ordered:

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